Signing of the Memoranda on Gibraltar between Spain and the United Kingdom

​The Minister of Foreign Affairs, the European Union and Cooperation has today signed, on behalf of Spain, the four bilateral memoranda which are referred to in the Protocol on Gibraltar annexed to the Agreement on the Withdrawal of the United Kingdom from the European Union. These documents contain the agreements relating to citizens’ rights, tobacco and other products, cooperation in environmental affairs and police and customs cooperation. Cabinet Minister David Lidington signed on behalf of the United Kingdom

29/11/2018

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Within the framework of the withdrawal of the United Kingdom from the European Union and in accordance with the Guidelines provided by the EU itself at the time, Spain entered into negotiations with the United Kingdom almost a year ago to ensure that the withdrawal of Gibraltar is as orderly as possible and beneficial for Spanish interests. The Spanish government’s objective within this procedure is to guarantee the rights of the workers in the area and to alleviate the existing socioeconomic imbalances on both sides of the Fence. After tough negotiations, a satisfactory agreement for Spain has been reached.

These four memoranda are mentioned in the Protocol on Gibraltar annexed to the Withdrawal Agreement, signed by the EU and the United Kingdom, which was approved by the European Council on 25 November. This is the first time that provisions concerning Gibraltar negotiated by Spain appear in the European Union basic law. Therefore, this Protocol is part of an EU-UK agreement, while the memoranda focus on the same issues from a United Kingdom-Spain bilateral perspective. Furthermore, the bilateral agreements reached on Gibraltar shall be completed with an international agreement on taxation and protection of financial interests.

The agreement on citizens provides specific modalities of execution of the rights and guarantees for cross-border workers in Gibraltar that the Withdrawal Agreement grants to citizens and workers in general. Thus, the rights of workers in the Campo de Gibraltar are guaranteed, including their social benefits, which shall be enjoyed on equal terms with the locals according to the principle of non-discrimination. In addition, mechanisms for coordination and the exchange of information between authorities are provided for to ensure effective compliance. Likewise, the British authorities have undertaken to reimburse the Spanish Treasury for the difference in unemployment benefits advanced by Spain to cross-border workers.

With regard to tobacco, the Protocol and the MoU establish obligations to control the Gibraltarian market and the traceability of tobacco products which must be implemented before 2020. Therefore, appropriate coordination and information exchange measures are foreseen. In addition, before the end of the transition period, in June 2020, the Gibraltarian authorities must reduce the price of tobacco products so that the price difference with Spanish prices does not exceed 32%. All these measures are key to the fight against the smuggling of this product and its illegal entry into our country, with the resulting effect this has on the security of the area and tax collection.

Regarding environmental issues, the MoU establishes the principle of cooperation to ensure the highest standards of protection in the area, with the consequences resulting in issues such as the management of solid and liquid waste, control of fuel supply to vessels and scientific research, including marine research using vessels intended for this purpose.

For the purpose of improving the security situation and fighting crime in the area, a text on police and customs cooperation has also been agreed, which makes it possible to strengthen the systems of coordination between police authorities in the area. Therefore, the collaboration in the investigation and prosecution of a whole series of crimes can be improved, particularly those that most affect this area, such as drug trafficking and the fight against human trafficking. This includes, for the first time among cooperation-related issues, offences regarding road safety and investigations in relation to financial crimes, as well as coordination in the area of customs, which will enable the fight against smuggling and drug trafficking, securing, where appropriate, the possibility of collaborating in joint operations.

With regard to the agreement on taxation and protection of financial interests, an agreement has already been reached regarding its content, and the procedure for signing off shall begin as soon as possible. As its content involves matters of legal reserve, it is necessary to sign an international agreement, which requires parliamentary approval.

This tax agreement will be the first signed between Spain and the United Kingdom to ensure that the tax jurisdiction of Gibraltar is transparent with our tax authorities and cannot be used for money laundering or tax evasion. This is such an important issue that an international treaty has been preferred despite the difficulty in negotiating it. Regarding tax issues, a reinforced system of administrative cooperation with Spain will be established by the Gibraltarian authorities in order to combat fraud, smuggling and money laundering, and to guarantee full tax transparency in Gibraltar. The agreement also establishes some tax residency criteria to prevent tax evasion. Ultimately, it is a step forward in preventing Gibraltar from becoming a tax heaven that enables the avoidance of tax obligations with the Spanish Treasury.

All these agreements guarantee an orderly withdrawal of Gibraltar from the European Union, including the transition period. It shall be prepared under conditions that guarantee the rights of citizens and workers in the area and that also begin to remedy the main imbalances in the relationship between Gibraltar and the Campo de Gibraltar. The Spanish government believes that they create trust for all and also show the virtue of the method of progressively advancing on solid foundations. It leads the way to be followed in the next negotiation on a new relationship between Gibraltar and Spain and the EU within the framework of the provisions agreed in the European Council of 25 November last.